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Q. Pelican Point Financial Group's clientele consists of two types of investors. The first type of investor makes many transactions in a given year and has a net worth of over $1 million. These investors seek unlimited access to investment consultants and are willing to pay up to $10,000 annually for no fee-based transactions, or alternatively, $25 every trade. The other type of investor also has a net worth of over $1 million but makes few transactions each year and therefore is willing to pay $100 every trade. As the manager of Pelican Point Financial Group, you are unable to determine whether any given individual is a high- or low-volume transaction investor. Design a self-selection mechanism that permits you to identify each type of investor.

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M9168106

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